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Consumer Spending Growing with the Handbrake On

Despite an improvement in the fundamental situation, growth of total private consumption in 2018 is likely to remain close to the range of previous years (+1.5%), and thus lag behind overall economic development (+1.7%). Employment is recovering only slowly and is restricting growth in consumption. Although unemployment continues to fall, the growth in employment itself is stagnating. Companies continue to be cautious when it comes to recruitment. In addition, they are likely to focus primarily on ways to improve their profits again. To date, they have largely taken a hit to their own books as a result of the economic downturn and surge in appreciation of the CHF, so as to avoid as far as possible having to reduce staffing levels (and wages). The expected increase in profit share seems to be inducing only weak employment growth (forecast for 2018: 0.5%) and low salary increases (0.7%).